Should know this but not sure.
Client left UK over 2 years ago and is a self employed non resident (agreed by HMRC) illustrator based in Japan. All done over the internet. She has a UK agent that has sourced work from UK based clients and the agent has then remitted her fees net of their commission. All work completed electronically and client has not set foot in UK for a couple of years. Does the income count as UK source arising and thus needs to be returned on a SA return at least in principle ? The added complication is that HMRC have lost our 64/8. HMRC assured our client when she left the UK that no return would be needed for 2013-14 however this was without knowledge of the UK source income and problem is it appears to have breached the PA for 13-14.
Bit heavy for a Monday morning but any help would be welcomed !
Replies (2)
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Is the agent independent?
A non-resident individual is only liable to UK tax on self-employment income to the extent that the trade is carried on in the UK.
The legislation does not refer to permanent establishments, but as a general premise and agent of independent status, acting in the ordinary course of their own business, are not regarded as a permanent establishment.
If the agent in this case, satisfies that criteria, I cannot see that any part of the individual's trade is carried on in the UK.
You will probably find that that also corresponds with the treaty provisions as well.